Turkey: Public – Private Partnership Model for Health Care Projects

Studies conducted by the Ministry of Health for an alternative financing method to enable the establishment of new health facilities has resulted in adoption of the Law No. 5396 ("Law"), which entered into force on 3 July 2005. The Law inserts an additional article into the Law on Basic Health Services dealing with framework issues.

The Law provides that projects for the establishment of new healthcare facilities or the renovation of existing facilities may be realized by individuals or private entities through entering into a contract with the Ministry of Health. These projects to be launched by the Ministry of Health cover thirteen different regions1 of Turkey, provided that more than one healthcare facility will be built in large cities such as İstanbul, Ankara and İzmir.

The projects are planned to be realized under an alternative financing model as a build-lease-transfer ("BLT") transaction. The BLT model may be considered as a variant of the build-operate-transfer ("BOT") model that was often used in Turkey particularly in the mid-1990s. The BOT model, mainly used in energy and infrastructure projects, enables the realization of the projects that require a significant level of funding, as well as technology, with the collaboration of the State and private investors. The model also enables the State to benefit from the management skills of private investors. Private investors may or may not be guaranteed a certain amount of revenue and ordinarily seek to recoup the investment cost by operating the facilities they build under the project for a certain period of time determined in the contract entered into with the relevant State body. Under the BLT model, which will be used for the construction of health facilities, the investors seek to recoup the investment costs by leasing the facilities built or renovated to the State for a limited period.

The BLT model is believed to provide part of the solution for the insufficient bed capacity of Turkey’s hospitals, and assist with the need for new technology and medical equipment. The current number of hospital beds in Turkey is 180,000 even though the number of hospital beds targeted for the end of 2005, as stated in the five-year development plan, was 200,000. The reasons for this insufficiency, as detailed in the proposal submitted to the Parliament for the approval of the Law, are explained as arising from the lack of sufficient funding2 as well as the high population growth.

Basic Components of the Law

The Law sets forth the general terms and conditions applicable to the projects. The details applicable to the tender process, as well as the contents of contracts to be entered into by the State and the private investors, are to be determined by the implementation regulation to be jointly issued by the Ministry of Finance, the Ministry of Health, the State Planning Organization and the Undersecretariat of Treasury. It is reported that the representatives of these governmental bodies are close to finalizing the Law’s implementation regulation.

According to the Law, the High Planning Council is the authorized body for determining the healthcare facilities to be built according to the need. The Ministry of Health will produce the preliminary designs and the basic standards applicable to the projects and will launch a tender3, open to the participation of both local and foreign companies.4 The construction phase is restricted by the Law to a time period of thirty-six months. Following the construction of the relevant healthcare facility, it will be leased to the Ministry of Health by the investors for a maximum term of forty-nine years. The facilities will be completely transferred to the Ministry of Health, at no extra cost, at the end of the lease period, subject to the approval of the Transfer Committee.

Certain exemptions are also set forth by the Law, such as an exemption from stamp tax and duties for all contracts to be entered into by the State and private investors under the projects and the relevant documentation.

The following issues will be taken into consideration when determining the lease amount to be paid by the State to the investors:

(i) whether the immovable property upon which the health facility will be built belongs to the investor, or if it is provided by the Undersecretariat of Treasury;

(ii) cost of the investment realized by the investors;

(iii) whether medical equipment will also be provided by the investors; and

(iv) whether non-medical services will also be provided by the investors.

The tenders are expected to be launched by the Ministry of Health in the second half of 2006, following the finalization of the implementation regulation, and the tender announcements must be made ninety days prior to the tender date. It remains to be seen whether the target dates can be met.


1. These areas are İstanbul, Ankara, İzmir, Bolu, Samsun, Aydın, Denizli, Kırşehir, Alanya, İçel, Gaziantep, Malatya and Elazığ.

2. The share of the Government’s health expenditure in the total budget is approximately 3%, although the World Health Organization’s recommended minimum ratio for developing countries is 10%.

3. The Law provides that the tenders to be launched under the Law are not subject to State Tender Law No. 2886 and the Public Tender Law No. 4734.

4. According to the information published in the press, the tenders will be realized within the framework of the negotiation method.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions